NEW YORK TIMES

Chronic flaws hobble utility in storm's path

By Danny Hakim, Patrick McGeehan and Michael Moss

New York Times

POSTED: 01:30 a.m. HST, Nov 14, 2012

It was four days before Hurricane Sandy would arrive, and trustees of the Long Island Power Authority gathered as forecasters' warnings grew dire. For more than two hours, the trustees talked about a range of issues, including a proposal to hire a branding consultant.

But discussion of the storm lasted just 39 seconds.

The trustees' approach toward the looming disaster reflects deep-rooted problems at the authority that have hobbled its response, causing hardship for hundreds of thousands of its customers, according to an examination of the authority's performance by The . The bungling of the storm has called into question the authority's very future.

The Times' examination shows that the authority has repeatedly failed to plan for extreme weather, despite extensive warnings by government investigators and outside monitors. In fact, before Hurricane Sandy, the authority was significantly behind on perhaps the most basic step to prepare for storms — trimming trees that can bring down power lines.

Customers have been exasperated not only by a lack of power but also by the authority's inability to communicate basic information. Long Islanders have recounted tales of phones unanswered at authority offices, of wildly inaccurate service maps and of broken promises to dispatch repair crews.

Of course, the storm was highly unusual, and utilities across the Northeast have come under criticism for delays in restoring power. The authority said it had done its best to restore power.

Still, the recovery has been slowest on Long Island, where roughly 90 percent of the authority's 1.1 million customers lost power.

"Resources came late," said Frank P. Petrone, chief executive of the Town of Huntington and a former official with the Federal Emergency Management Agency. "When they came, there was no management to utilize those resources effectively. And it took 10 days for them to get their act together."

As of Tuesday, more than 10,000 customers were still in the dark on Long Island.

Senior officials, including Gov. Andrew M. Cuomo, have excoriated the authority, but in the past, they have paid little attention to its management.

The authority has not had a chief executive for two years. Five spots on the 15-member board are vacant, three of which are Cuomo's to fill.

The authority's chairman, Howard E. Steinberg, has stayed on past an expired term. He was originally appointed by Gov. George E. Pataki, who left office almost six years ago.

Trying to fend off attacks on his oversight of the Long Island Power Authority, Cuomo on Tuesday established a high-level panel, called a Moreland Commission, to investigative how utilities across New York, including the authority, handled Hurricane Sandy and other storms.

He also revived a proposal that he made in his 2010 campaign to combine the authority with other state energy agencies, but has not ruled out privatizing the authority.

"I don't believe you can fix it," he said. "I believe it has to be overhauled and you need a new system."

The authority's chairman, Steinberg, said the trustees spent only 39 seconds discussing the storm at the meeting because the board was confident that a plan was in place. Steinberg noted that the trustees were not utility professionals but rather "an oversight board of citizens."

"At that point, a few days before, there is nothing the board can do one way or another," he said.

In many ways, the Long Island Power Authority, known as LIPA, reflects the shortcomings of the state's quasi-independent public authorities, which are often criticized as a shadow government that resists scrutiny. Long Island is the only region of New York where the main electrical utility is run by the government.

While oversight has drifted, politicians have installed relatives and friends in executive positions at the authority, turning it into a rich source of patronage jobs, according to interviews and a review of state records.

These positions have an average salary of $110,000, the records show.

"There are many, many people who have been placed at LIPA during my tenure here who have no utility experience or training in the job that they have been placed in," said Tracy Burgess-Levy, the authority's director of community relations. "Quite frankly, I think that's a far bigger issue."

Burgess-Levy is herself married to a former congressman, David A. Levy, although she said she had extensive utility experience, having worked for the authority or its predecessor for nearly 20 years. She is paid $121,000 a year.

In an interview, Michael D. Hervey, the authority's acting chief executive, defended the authority and indicated that he believed some customers had unrealistic expectations.

"We are on plan," he said. "We cannot tell each of our 1.1 million customers exactly what is happening with their service. You can tell them generalities. So we cannot fully supply that information needed for individual customers. But I think, all said, when we look around at neighboring utilities, and the damage that we had, we are progressing very well."

The interview took place at an office in Hicksville, where the scene was tense. A stream of frustrated customers knocked on doors, pleading for information and shouting at security guards, who turned them away.

"We haven't had power since it happened," Sophonie Sylvain, 30, a nursing home worker from Amityville, told the guards, her two young daughters and baby in tow. "Every day I call," she said, adding that she always received the same response. "It will be on tomorrow."

As utility crews try to restore power on Long Island, they are hindered by an antiquated record system that consultants have repeatedly criticized, according to interviews and state reports.

Workers have often had to use paper maps and documents to locate damage. The record system has made it extremely hard for the authority to describe where power is out and where it will be restored, as well as when crews will arrive.

The map on the authority's website was so flawed that a few days after the storm, it showed that power had been restored to more customers in Lawrence, in Nassau County, than there are homes in the village, said its mayor, Martin Oliner.

"It was totally fictional, just preposterous," Oliner said.

He asked the authority to reroute power to the village from an undamaged substation, which would take a few days. The authority eventually agreed, but continued telling Lawrence residents that they would not have power for three weeks.

Besieged by complaints about its map, the authority removed it from the Web and replaced it with a less detailed version.

These problems were first highlighted last year during Tropical Storm Irene, when it took the authority nine days to restore power to 523,000 customers.

After that storm, the state's Public Service Commission issued a report that upbraided the authority.

The authority's monitoring and information systems were "nowheres near the industry standard," said Walter P. Drabinski, a consultant on the report.

He said the authority had put off spending the $30 million or $40 million it would have cost for a state-of-the-art system.

"It's a huge computer upgrade that will take until next spring," Hervey, the authority's acting chief executive, said. "That will help us get a lot more information to customers."

Experts said the storm highlighted a fundamental flaw in the way that electricity is delivered on Long Island: The authority does not operate the power grid.

The authority is akin to a holding company, with fewer than 100 employees. It turns over service and maintenance to a contractor, impeding its ability to move nimbly during a crisis.

To complicate matters, the authority is switching to a new contractor in 2014, but its old one, National Grid, has been handling the grid during the storm and its aftermath, (National Grid was outbid for the contract by Public Service Enterprise Group.)

As a result, the authority has had less leverage over National Grid during the storm recovery.

National Grid has defended its performance.

"We are progressing very well, given the unprecedented damage from the storm," John Bruckner, a senior vice president, said at a news conference.

The authority's structure is a legacy of its creation.

Gov. Mario M. Cuomo set up the authority in the 1980s when the Long Island Lighting Co. enraged customers by failing to restore service quickly after Hurricane Gloria. The company had also stirred controversy over high rates and plans to open the Shoreham nuclear power plant.

The elder Cuomo vowed that the authority would keep costs down and communicate better, but even before Hurricanes Irene and Sandy, it had alienated customers, who pay some of the highest rates in the nation.

The authority ranked last in two recent national satisfaction surveys of utility customers, one by J.D. Power & Associates and another by American Consumer Satisfaction Index.

Politicians often seem to focus on the authority when they are looking to place relatives and friends at jobs there, according to interviews, local media reports and payroll records.

Lynda Nicolino, the former counsel to the Suffolk County Republican Party, earns $260,000 a year as the authority's general counsel. Barbara Ann Dillon, a $125,000 compliance officer, is the daughter of Denis Dillon, the former Nassau County district attorney. Andrew McCabe, an assistant general counsel paid $117,000 a year, is the son of a former top judge in Nassau County.

Other top executives include former aides to the state comptroller, Thomas P. DiNapoli, the former Suffolk County executive, Steve Levy, and the former head of the Suffolk County Republican Party.

The executives did not respond to requests for comment.

Some customers said they sympathized with the authority's challenge.

A 70-foot-tall oak knocked out power to Patricia Cammer's home in Huntington Station on the night of the storm. The authority restored power six days later, but then the northeaster last week knocked out power again.

"LIPA is not prepared for this, but then who is?" she said.

Others were less forgiving.

Kathleen A. Desio, a mother of two boys in Baldwin Harbor, said she had spent two weeks without power in a house so chilly that her family's 17-year-old African gray parrot died.

"I think my children could do a better job managing that company than their current staff does," Desio said.

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